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tv   Bloomberg West  Bloomberg  April 20, 2016 6:00pm-7:01pm EDT

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an, which included a persian gulf summit. it comes at a time of increasingly strained relationships with the saudis, who are angered over u.s. legislation that would allow 9/11 victims' families to hold the saudi's libel an american court. 500 people may have drowned in a shipwreck in the mediterranean. the incident happened last week between italy and libya. there were 41 survivors. eight people are dead from flooding in houston. heavy rain began last sunday. a flash flood watch is in effect through tonight. u.s. authorities say a nearly half-mile long tunnel from mexico to san diego has been discovered. more than a ton of cocaine and seven tons of marijuana were seized. six people have been arrested. the american lung association has released its annual report card. eight out of 10 californians live in counties with unhealthy pollution, about 32 million
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people. the report gives los angeles and bakersfield the worst grades. global news 24 hours a day part by 2400 journalists in 150 news bureaus around the world. bloomberg west is next. ♪ emily: i am emily chang. this is bloomberg west. qualcomm cannot escape the gloom, facing a sluggish third quarter. we parse through the main takeaways. google is back in the eu's crosshairs as regulators take aim at android. how much could the case hurt google's business? shelling out for one of tesla's white model x cars.
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first, qualcomm continues to get hit by the slowdown in demand for high-end smartphones. they forecast third-quarter earnings short of estimates thanks to weaker than expected appetite for the most expensive mobile phones. joining us from new york with a breakdown, cory johnson. what are the big takeaways? cory: if you have a smart phone, you have a qualcomm chip in them, almost guaranteed. the problem is growth has been shrinking. when you look at qualcomm's revenue, we can see a decline steadily as the smartphone growth rates have slow down in china and all over the world. when you look at the percentage change, you see some indifferent. the percentage changes, we see things have been getting worse on a year-over-year basis. that is bad news for these guys. what is interesting is they have
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figured out they can still make money right citing their business. have a profit margin that is getting better as they had cycled through issues managing costs. emily: the smartphone market is obviously saturating. high-end smartphone sales do not appear to be getting better. what does that mean for qualcomm? cory: it means they have to manage expenses. they can see where this is going. they want to get paid better in china. they talked about progress in that matter. customers that did not want to pay them in china, they have worked through some of that. yesterday, we were talking about intel. they finally decided with the , they are going to have to cut jobs. i want to show you a comparison to intel and qualcomm. intel, you can see times where they have had layoffs.
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you have layoffs announced finally at intel. qualcomm, same situation. they did this in 2015. they could see on the horizon the issues they were going to have. now they are getting the benefit with slowing sales. at least they are seeing profits increase. reallys the management grasps the difficult decisions they had to make and made some of them to lower costs. emily: interesting. cory johnson, thank you for that update. google is back in the eu's crosshairs as antitrust regulators file charges against the android business, saying being preinstalled is stifling competition. caroline hyde has developed.
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>> eu regulators are going to google, accusing them of wielding too much power with android, crushing competition in the app space. they have sent a formal antitrust charge to google, saying they stop competing search engines from tablets with the android operating system. regulators accuse google of paying some players to only install google's search app on phones. the objections could lead to huge fines and major changes to the way google does business. the eu complaint about google's shopping service and is worried about phones being preloaded with apps. partnerships its agreements are voluntary, and the android model is designed to be good for competition and consumers. this is the latest in a formal
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investigation by the eu, sparked by initial complaints dating back to 2013 from an industry group backed, at the time, by microsoft and nokia. emily: googles problems in europe date a few years before that. joining me now are jack clark, who covers google, and mark maheny. mark, you have been covering google for years. the eu made it clear they mean business. how much could this hurt google? >> this will continue to be an issue for google. is no company, maybe with the exception of facebook, that has dominance in internet advertising, search, as this company does. amazon does not have this market share. there will be other countries that will look at it in the future. what kind of impact could this have?
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it is impossible to tell. just a fine is not a big deal for shareholders. a material change in business practices, unbundling of search from the operating system or a required change to the search engine results page, that could become material to google. hard to know. emily: jack, where does this proceed from here? but the eune thing, has made it clear they are not happy with the business overall. >> there will be a discussion period. reply,has 12 weeks to then a further conversation. regulators have been signaling they are trying to be strong. they want to make an impact. they have suggested it cannot just be a fine. it has to be something that has the company behave. we do not know if it is going to happen, but if it mandates
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changes on the software, that could have significant impact on the ability to make money from android. emily: the european commissioner has made it clear she is not going to drop this. google has tried to settle on these other cases a few times. listen to what she had to say earlier today. >> the remedy in this case is simple. it is to stop these practices that we find to be damaging for innovation and competition. course, quite simple and straightforward. yet, we have found evidence that it has been going on for quite some time. loty: google does not say a about how much revenue it gets from android, but we believe it is 50%. how much do you estimate? >> the number sounds high. it is in direct. if you did not have android, you would not have mobile internet
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today as it is. are they one of the biggest beneficiaries of global internet? absolutely. internet revenue for google is probably 20% of total revenue. it is hard to calculate. android revenue opportunity created is probably 10% or 20%. emily: do you think the accusations are fair? >> there is either voluntary bundling or there is not. look at the eu fact sheet, about a page. the fact have been -- have not been publicly made available. ,f they are required bundling per european union rules, maybe there is an issue. emily: are they voluntary or not? >> we have a document with htc that mandates as part of the manufacturer agreement they bundle certain apps.
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we do not know the back story and are waiting for the facts to come out. being a profit driver for google, android keeps costs down. because chrome is bundled with android, they do not have to pay to get searched people. , microsoft font antitrust issues for a decade in europe and had trouble transitioning into the digital age. they are still struggling. could this hurt google over the longer term? a is it turns out to be distraction of management attention, it could. be, withcould leviedft, fines were during the top of the desktop cycle. the reason microsoft suffered was not because of regulatory actions but because they missed the trend towards the internet. what could happen is when apps
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start coming unbundled is when the zuckerberg view of messaging and bots taking over -- there is the regulatory process can take it while. piece about was a how facebook is the thing that google has to worry about right now. mark, thanks so much. jack, thank you as well. trail toizon blaze a integrate virtual reality into news reporting? we will speak with the ceo of huffington post about their first acquisition in that space. apple announcing it will delay its earnings release to april 26 for the memorial service of former board member bill campbell, died monday and was close to the apple family for many years. we will be right back. ♪
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emily: virtual reality may be hitting the mainstream. as news and media companies dabble in the technology, exploring ways to create immersive video experiences for viewers. on wednesday, aol announced it is making its first acquisition for the huffington post. the company has agreed to buy riot, a studio in l.a., for an undisclosed amount. joining me to discuss the deal, huffington post ceo, jared grusd, and the riot ceo. how long have you been in talks? >> thank you for having us on the show. we met in september at a
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festival in central park. i was struck by four different things. the first is his presence and leadership. the second is he was displaying some films in virtual reality. i was attracted to two things. noveltygory -- was it a or a compelling way to tell stories in the future? bryn shared with me the fact that he made 100 films in 40 countries. finally, the overall mission. huffington post has been a mission driven company to inspire and empower. the mission of riot has been the same thing. we thought this could be a tremendous partnership to do something transformative. emily: what convinced you to go through with this? what were the terms? >> for us, it was an absolute dream. the work that ariana did at
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huffington post blazed the trail for young media companies to come along. we have a wide audience of the people excited about the work we are doing. we are linking every story to virtual reality. it is the most exciting thing for us and a long time. we could not think of a better partner than the huffington post. emily: can you share more information on the terms of the deal and what your vision is for po verizonn the huff- family? ostwe are forming huff-p riot. there are two pillars. the first is storytelling journalism. how can we bring virtual reality storytelling across each of our 15 additions to create one of the biggest virtual reality newsrooms in the entire world? that is the first piece.
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the second is in the context of building out capabilities. bryn and his team have become world-class brand ambassadors. towill be working with riot build content for each of our brand partners. emily: what kind of stories or journalism do you think works best with this potential future of virtual reality? , the thingf the bat that is extraordinary is there has been a platform shift with the way we see video. , you are ableeo to move your phone around and see things in a way you have never been able to. the opportunity for how this technology will radically change news, documentary, journalism, across these platforms, you will see a shift. for us, that opportunity to
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bring this kind of technology to 15 news bureaus of the huffington post means our reach can grow. we can tell these stories. can virtual reality, you step inside a story and experience the world in a way you have not been able to do with traditional video. you can see the scale of it. we are really planning on doing some amazing work together. emily: i spoke with areata about this last week. verizon has bid for yahoo!. if they buy yahoo!, how do you see the media assets working together? do you see much overlap between vertical? huffpost's i think verizon acquiring yahoo! is for a different day and for a different set of people. we are excited about talking about how the huffington post is advancing our strategy with
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riot. we are excited about the things we can do together going forward. the opportunity between riot, aol, post, and verizon, to transform the world of storytelling is compelling. ooser, jared grusd, bryn m thank you for joining us. >> thank you for having us. nielsen was the gold standard for tv viewership until the streaming industry upended i t. ♪
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emily: nielsen just reported earnings. sales and profits rose for mayor ago, but it is a critical time for the company.
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it is getting critical audience measurement off the ground, which would measure views from the vr and streaming, a major attempt to catch up with media consumption trends. there is still a standard like nielsen's tv ratings. fromng me now, mitch, stamford connecticut. the old business of serving people via nielsen boxes makes sense. nobody understands how you will do this. how do you intend to measure streaming on phones, set-top boxes, and get it right? >> great to be with you. thanks for having me. we are building on our historical strength, measuring television audiences. we are measuring viewing across all the platforms that consumers love so much. we are capturing that viewing, focused on video content,
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whether it is a tablet or pc, or a connected device like apple tv or roku. we are capturing all that viewing, measuring those different viewing environments, in a way that is comparable, so we can represent a total audience for the market is -- marketplace. emily: the service has been delayed. what work are you doing to make sure the information you are giving is reliable? >> we are on track with our rollout. our products are in great shape. we have a growing number of clients receiving data, getting more familiar with it in the new metrics we are providing to clients, and understanding the impact on their business. we are working closely with our to fit with changes they are going through in their businesses and business models. we have stayed on track with the execution and rollout of the
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plan throughout the calendar year so far. the softwaretrue is preloaded onto phones and data is sent back to nielsen? if so, how'd do you get information from set-top boxes? >> there are a variety of ways consumers view. we have a variety of technologies and methodologies we deployed. if you are viewing the video versus ahrough an app web player or a connected device attached to your television set, each of these are different ways consumers view content. we have a different measurement methodology associated with each. what they have in common is a combination of big data sets that we have access to through our work with publishers like facebook and tencent. we combine that with high quality panel-based information
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to get the best of both worlds. we get high quality from our historically strong panel approach and the incredible granularity that big data sets provide. emily: it sounds a little big brother. our viewers being tracked with consent? >> we are focused on privacy and respecting consumer interests around privacy. a privacy officer that receives all our product design. wefact, one of our tenets is design respect for privacy into our product from the start. if you are a member of the nielsen panel, you are opting in to that service. we think that is important. emily: i presume you cannot track netflix data. everybody wants to know how many people are watching house of cards. only netflix seems to have that information. to what extent can you track
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netflix, amazon, and hulu? if you cannot, does not undermine the model because more people are watching shows produced by amazon or netflix? the growingf consumer interest in subscription video-on-demand platforms like netflix, hulu to 63% of allw up u.s. households that have a subscription to at least one of those services. we rolled out a measurement methodology that allows us to capture the viewing last year. over the past several months, there has been tremendous interest from media clients. emily: we have to leave it there. we are getting a commercial break. ♪
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two michigan regulators and a municipal employee in flint have been charged with
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evidence tampering and other crimes in connection with the water crisis. >> they failed to discharge their duties. they failed. theirailed in responsibilities to protect the health and safety of families of flint. they failed michigan families. indeed, they fail us all. i do not care where you live. mark: michigan lawmakers have taken a step towards directing another $126 million to the water crisis, including $25 million to replace underground pipes. the sweltering heat that has gripped india for weeks has killed more than 160 people in the southern and eastern parts of the country. temperatures are as high as 113 degrees in some areas with relief from monsoons likely weeks away. a tremor ravaged ecuador before dawn. the 6.2 magnitude jolt was the strongest aftershock since the
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7.8 earthquake that killed 553 people. new diplomatic ties between the u.s. and cuba have led to an exodus from the nation. thousands are hoping to take advantage of a loophole that allows any cuban that can make it to u.s. soil can stay before politicians can end that decades-old policy. powered byrs a day 2400 journalists in 150 bureaus around the world. i am mark crumpton. i am joined by paul allen with a look at the markets. good morning. : another better than expected day. another unexpectedly from wall street. not really translating into games over in new zealand. it is looking flat right now.
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we are expecting gains on the nikkei and asx. locally, gains in oil and iron drivers.xpected to be bys has been supported cutting production of mining forecasts. mitsubishi dropped 15% on wednesday. they have been caught up in the emissions scandal. they will be closely watched at the open. that is some of what we are looking at in the asian pacific. i am paul allen from sydney, australia. ♪ ♪ emily: turning to china. believesounder jack ma the chinese economy will remain enviable for 20 years.
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the southd this in china morning post. alibaba's purchase of the newspaper was finalized. the cofounder said that the rapid growth of consumer culture could help china through temporary difficulties. how much of the slowdown we are seeing in china is temporary? how is it affecting funding environments? , hansith me to discuss tung. always great to have you. do you think the chinese economy will be enviable for two more decades, or will the slowdown have a pronounced impact? >> china is facing the reality of a new normal situation. they have gone from 10% a decade ago to 6% or 7%. improvethat needs to
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before it can grow again. there are changes that need to be made in order to do that. emily: are you disagreeing with jack ma? >> i am cautiously optimistic. emily: what do you make of the fact he is doing an interview in a newspaper he owns? >> interesting. they have been a harsh critic of what is going on in china. now, you have a balanced perspective. you have a more pro-china perspective. overall, it is good to have both. emily: what are you telling private market companies in china about the environment? what internet has been doing in china, the changes it has been brought. most of our investments are internet related. some continue to grow and serve customers well.
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take advantage of technologies and efficiencies. we are happy with our portfolio. emily: are you talking about unit economics? >> of course we have to. our investment is based on sectors. we have metrics we track for our portfolio. we benchmarked them compared to everyone else. we look at how well companies are doing. over a 12 to 24 month period, and give them advice accordingly. most of it has been healthy unit economics. emily: there has been volatility in the public markets here. that has sort of stabilized. we are still hearing about startups having trouble raising money. how is this trickling down to companies you are investing in? >> in china over 12 months, there was volatility in the marketplace, especially during the summer of last year.
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most companies in a non-internet trouble raising money. but internet growth has done much better. bots: tencent pioneered and some of the features we are seeing facebook integrate in a messaging services. takingou say this is fair inspiration, or is facebook copying the chinese? >> whether it is facebook or snapchat, everybody is looking at what is happening with respect to wechat. one of its top influencers were featured on another show. emily: this is a lip-synch app from china that has users mostly in the united states. >> and europe. you are seeing more opportunities, chinese things becoming innovative and doing things for the global market. emily: twitter just hired a new , which isina
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interesting, since they have been blocked for many years. there have been talks about her potential ties to the chinese government. twitter says she is just there to help with ad sales and data. >> a lot of companies are looking to expand beyond china. snapchat,nstagram, all looking at that. having someone on the ground for twitter makes sense from an ad sales standpoint. also, in case facebook got into china, twitter would have someone on the ground. emily: are you optimistic that will happen? baidou wasm presenting at the facebook conference. >> i think what mark has done, speaking in chinese in an interview, giving a lecture in being at tiananmen
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square, he has done a lot to impress the chinese government. really, i have talked to analysts that say it will never happen. >> "never" is a strong word. certain exceptions could be made for the company with the right attitude. emily: twitter? >> i think mark has done a lot for facebook. ns, thanks for sharing your perspective. , founded bydacity sebastian thrun, bringing on my nect,ng off-line with u-con which is led by graduates of the program. i sat down with sebastian thrun and asked him if he thinks the best education is a combination of online and off-line curriculums. >> the best education varies on the person.
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some hate them, others love them. --have been experiencing experimenting like crazy. people, it makes a huge difference in studying success. emily: will this be in every city? >> it is starting today in four places, san francisco being one, los angeles, and new york. students inr private spaces to scale it up. if it works well, we will scale to the entire world. are an active participant in the gig economy. what does that mean? >> the gig economy means that people can get a job easily, multiple jobs. jobs are defined by customer needs. mentors are all around
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the world. there are homework graders waiting for assignments. andoes to brazil, spain, gives to the student a counter rating. students can say, i like this report. we keep the ones that do a good job. emily: are those people contractors? >> contractors. emily: how do you handle the question of benefits? ,s the gig economy expands there are people that are not necessarily covered in a traditional workforce umbrella. >> we pay our people handily. many make more than $10,000 a month. some make $20,000 a month. we do not cover benefits directly. emily: that was sebastian thrun of udacity. uconnect watches next month in san francisco, new york, and l.a.
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stanford has long been considered an incubator for silicon valley startups, now uc berkeley is leading the charge. do not forget to tune in this weekend. we will bring you our best interviews of the week. , asill hear from alec ross well as sebastian thrun on his new initiative in china. the best of bloomberg west this weekend. ♪
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emily: a story we are watching. ford paid a premium to get its hand on one of tesla's first suv's. according to registration $199,000, they paid 64tha white model x, the
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when mated a factory. the vehicle has been spotted in detroit. ford will often buy cars from competitors and tear them down to reveal components and materials. it is unusual to see such a high price for an early model. stanford has long been considered an incubator for silicon valley startups. could there be another major incubator an hour to the north at uc berkeley? jeremy think so and has just launched a vc firm that will focus on investing in startups from his alma mater. they just raised $6 million from well-known names. he joins me here in the studio. you are 24 years old, right? >> yes. emily: just out of college basically. why berkeley? ,> we started the house fund
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the first fund explosively focused -- exclusively focused on berkeley startups, student and alumni startups. i graduated from berkeley in december of 2014 and spent the last five years building infrastructure to support entrepreneurs on the campus. emily: why has berkeley been ignored? >> berkeley has this incredible history. we have seen companies like apple, tesla, founded by cal alumni. they are incredibly hard-working and humble. emily: more than stanford people? is that what you are saying? founders.peak for cal i look at startups over the last five years. that venture funds of $100 million or more support different communities, and there is no fund supporting the
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berkeley community. at the same time, i launched student groups during undergrad, and there are interesting companies popping up on cal's campus. i started an organization that brought together the top student entrepreneurs on campus. we would help each other out, solve problems. we leveraged this community to ride the new wave in cal's community. then we launched free ventures, the first student run nonprofit accelerator program to help students with big ideas and prototypes to take ideas to the next step. emily: how is the university cooperating with the fund? >> this is a fund outside of the university but exists to support it. we have had tremendous support. i spent the last five years working with key faculty leaders, driving innovation on cal's campus. today, we have different accelerators focused on verticals, 50 clubs around
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entrepreneurship. 35,000 students. you have a vibrant ecosystem. emily: the university is getting equity stakes? >> not currently. we have a vision for the fund where we will give a portion of the upside to support early-stage entrepreneurship on campus. it is something we will be talking more about in the coming months. we are supporting a number of cal startups and have made six investments. emily: stanford has been criticized for being too friendly to entrepreneurs, perhaps that there is a conflict of interest. innford gets a state startups that come out of their incubator. is that there? >> in the berkeley community, startups create a tremendous value. some startups founded on campus cal has never
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capture that value. alumni byre ccal design. they believe in the opportunity and want to invest. they believe they can help in other ways. suddenly, the cal community is capturing value. if you can say your first they wills an alum, be inclined to invest in the next generation. startedtanford alums google, snapchat, yahoo!, cisco. they shout that from the rooftops. what more do you think berkeley can do to create a network of their own? >> we need to get the cal alu mni shouting loud and proud. there are companies by alums like tanium, ka-bam, started by alums.
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there are those on campus like indie-gogo, that are growing quickly. these companies are out there. they should be shouting about it. emily: jeremy, we will be watching you. 24 years old, of the house fund. microsoft and outlook that -- alphabet set to report earnings. what you should be watching. ♪
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emily: mexican billionaire carlos slim maybe giving up on kpn. he is considering selling a than threen less years after trying to take over the company. he has been gradually decreasing holdings after withdrawing a 7 billion euro bid for the company in 2013. the breakdown was a major
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setback to plans to expand beyond latin america. are outt and alphabet with earnings thursday. they have talked estimates in the past. --they continue the trend here to see if they continue the trend is ramy inocencio. what are you watching? >> looking at microsoft, the share prices are down 1.5% in after-hours trading before we get the data tomorrow. the story we are talking about, like ibm or intel, which reported this week, is out with the old and in with the new. from the reliance on personal computers to the internet of things. at least with microsoft, the cloud. the pc market in the first quarter fell 9.6%. if you are putting your chips in one sector, you do not want to put it in the pc market. is expected at
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$.64. what you alluded to is eps estimates beat in 10 of the last 12 quarters. it will be interesting to see if it holds on for the next quarter. a couple analysts came out with strong recommendations. saying they should not have trouble meeting third-quarter estimates on strength from azure. buyr saying microsoft is a as they make progress on the cloud transition. upbeat potential earnings forecasts for microsoft. whatng ahead, we will see we have 24 hours from now. emily: alphabet as well. we were talking about the android investigation out of
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europe. are we expecting any more information from google about the case? >> it is unlikely we will get more information on the case. in many senses, it was priced in. people expected her to the regulatory action. at this stage, it is not specific enough to move. the story will be about advertising, the cost of alphabet, fiber, health care, nest, and core businesses like youtube. emily: what are the expectations for alphabet? >> a 21% increase in earnings up $3.5.4 billion from billion in the same period last year. earnings per share, $6.30 or so. you're just was saying -- your guest was saying that search will be fine at 38% of the
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global search market. it is things out of its control or peripheral to its main business, which is what happened with the european commission charging google. they are also getting bad press in britain about taxes. issues, google backing apple in the san bernardino case. the core stuff for outlook that, everyone expect to be good. it is the peripheral stuff everyone will be watching. ramy inocencio, jack clark, think you both. who is having the best day ever? everybody who works in tech. according to glass door, tech firms make up 20 of the 25 highest paying companies in the u.s.. companies like google, facebook, pay an average of $150,000 a year. one of the main reasons is growing demand for highly skilled workers in the us
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treasury -- in the industry. one of the top earners? juniper, followed by google. tomorrow, i sit down with the creative minds behind "silicon valley." they join us ahead of the premier. now from sanor francisco. ♪
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♪ announcer: from our studios in new york city, this is "charlie rose." charlie: tonight, a conversation with president obama. he traveled to saudi arabia, united kingdom, and germany. our relationships with those allies, the role of russia and iran will be key items on his agenda, we will also talk to him about he sees america's role and lessons he has learned. the interview took place monday afternoon in the blue room at the white house. here is that conversation. thank you for letting us be here. it is a great pleasure tse

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